Factors Driving Hotel Wellness, Asset Management and Revenue

The original value and objectives associated with spa facilities and wellness programming have surpassed preconceived departmental importance.
Mia A. Mackman
This article reveals how spa and wellness aspects are disseminated throughout the whole guest experience, and how wellness motivated design and construction elements complement property development, enhance marketability and engagement and is spurring new growth across the hospitality sector. This article also examines how critical management adjustments, and product and service enhancements can significantly add value, increase RevPAR and improve average daily rate performance.

Built-In from the Ground Up

Hotel design aspects have lined up with wellness construction counterparts and evolved into a thriving wellness-driven real estate market. This marks a profound shift in the design and permutation of wellness and hospitality. Wellness Lifestyle Real Estate represents approximately $119B USD of the $3.7T USD global wellness economy and is projected to increase 6% annually in the next several years, growing to $180 billion by 2022. “This rapidly growing sector has historically included residential, hospitality, and mixed-use real-estate developments with wellness-related facilities and services incorporated into their planning, design, and programming. ”
 
The Wellness Real Estate market indicates powerful growth on both ends of the spa and wellness continuum. “There are over 740 wellness lifestyle real estate and community developments built, partially built, or in development around the world, across 34 Countries. ” In order to achieve interconnected value, it’s becoming increasingly important to consider new development perspectives with a wider view, and broader planning. The activity we are seeing from the ground up, is an innovative and inclusive approach to wellness focused hospitality, mixed-use and property real estate expansion.
 
In the years to come, properties who choose to apply wellness inspired design and construction elements, will have the clout to leverage well-being beyond standard programming. This movement is indicated by the rate of market growth and increasing customer demand. Healthy lifestyles are based on everyday experiences. Building properties with this in mind, offers a long-term advantage. Those who decide to initiate the benefits of healthier-built hospitality, in conjunction with quality services centered on well-being will have unique opportunities to prosper in the years to come.
 
Wellness Lifestyle Real Estate Pipeline: Over 740 Projects Across 34 Countries
Source: GWI Build Well to Live Well 2018 Report

Management and Leadership

The urge to activate new wellness overlays continues to gain momentum. Yet, operational development is often encumbered by lack of investment, time, or concentrated action. Generally, a Spa or Fitness Director would assume the responsibility of developing a property’s wellness channels. Meanwhile, their primary focus would be dedicated to these respective areas, without typically being able to effectively cross into other departments i.e. food and beverage programs, in-room services or expanding into potential meeting and group opportunities.
 
If the intention is to create substantial layers of well-being throughout the hotel or resort, it’s wise to form a complete department assigned to appropriately develop and refine these features throughout the property. Companies who are seeking to advance their wellness programming and diversify their approach, should consider the benefits of enlisting a proficient Wellness Director or Well-Being Manager. This person would facilitate program excellence and drive successful department crossovers.
 
Furthermore, having a dedicated manager to oversee program efficiency, would add focus to the wellness lineups. This individual would manage and track the percentage of growth to safeguard the ratio between program performance and return on investment. Having someone in this role to lean on would shape the property’s unique attitude towards wellness and measure the impact and percentage of wellness-driven revenue on ADR and RevPAR performance. This person would also unite the wellness theme throughout the hotel, be responsible for quality auxiliary services and facilitate discoveries for internal and external marketability that is suitable for the property.

Cross-Department Revenue

In the past, spa and fitness assets have mainly been viewed as amenities to augment guest comfort and convenience. While the booming years of luxury spa experiences thrived in the 1990’s until 2008; the spa market has rebounded and surpassed the success of prior years with an upsurge of both new spa development, and wellness-driven market growth. Spa revenue in the U.S. has been experiencing steady growth since 2010 and now represents at $16.3 billion market.
 
Total Spa Revenue In The U.S. (Billions)
Source: ISPA 2016 U.S. Spa Industry Study
 
For many properties it has become essential to not only offer a well performing spa and fitness component but also include features that support healthier choices and nurture well-being. These assets impact the eminence of stay, healthy food, level of quality experiences and so on. For example, food and beverage outlets must increasingly cater to specialized lifestyles, food and diet restrictions, i.e. vegan, gluten-free, and so on. These distinct menu selections are common requests shared across the whole of the hotel, no longer considerations for singular outlets.
 
With increasing department overlaps, the rise of business and solo travelers has amplified the demand for various, beneficial in-room and poolside amenities. These have taken the form of in-room fitness programs, private tele-guided yoga and meditation sessions, relaxing in-room tub soaks, and on-demand massage services. New products are showing up as in-room indulgences, in addition to snacks and drinks in the mini-bar. And spa and fitness features are actively mixing with other key areas throughout the hotel. These segments stimulate guest stay, add value and advance new opportunities to increase the capture of add-on revenue.

Ways to Boost Add-on Engagement

  • Introduce add-on offers at check-in or through in-room marketing
  • Create add-ons that enhance existing treatments or services
  • Design new spa and dining combinations with motivating themes for couples, etc.
  • Format memberships with an uncommon mix of add-on benefits
  • Create employee recommendation structure with percentage incentives

Strategic Overlays

Nothing beats a well performing business strategy when it comes to incorporating various enhancements and add-ons. However, it’s vital to understand how manageable and appropriate the range of services are. Just because something might be trending in the marketplace, does not mean it will produce lucrative results, or have rewarding potential. Customizing the operational business structure with tactical planning is fundamentally important. It’s as vital as setting up goals for successful integration and program development.
 
The success of the Miraval Group represents one example of how a well-tooled strategy can significantly impact the RevPAR and the ADR of a business by incorporating an advanced perspective and mobilizing well-being at the core of the company mission. “As a global leader in wellness resorts and spas, we observed that Miraval understood that wellness is a mindset, not a commodity to be thrust upon consumers, which is a distinction that underscores our wellness strategy moving forward. Miraval is truly an integrative and authentic approach to wellness and wellbeing – an approach that we, over time, think will go over the broad mention of Hyatt in general.” Said Marc Ellin, the global head of Miraval Group. Last year, Miraval Arizona’s RevPAR grew 20.4 per cent, he said, while its ADR increased by 15 per cent and occupancy grew by another 6 per cent

Add-ons and Enhancements

One of the most effective ways to instigate new service engagement is to create offers that add weight to existing, premium selling packages. Introducing services this way, reduces perceived customer risk and complements overall package value. Add-ons are a popular way to expand upon spa treatments, and fitness amenities. They are generally easy to sell and have unique benefits when paired with the right services. Enhancing a well performing offer can spark curiosity and help garner attention for less noticeable services.
 
There are multiple ways to craft a solid selection of services. Committed retail partners can be valuable resources to provide support through special spa product allowances or backboard discounts. They are also good allies to develop and collaborate with to form a new layer of services. “Packages targeted at couples were mentioned by over nine in 10 resort/hotel spas (94%) compared to 71% of day spas. Wedding party packages were more frequently mentioned by resort/hotel spas (70%) than day spas (51%). ”

Final Thoughts

Choosing to embrace wellness with an all-inclusive methodology can transcend wellness themes to new heights. On behalf of new property development, it’s prudent to review the capacity and influence new building and construction possibilities hold. The lines between health and hospitality will undoubtedly continue to crossover into the future. These intersections will intensify the need for diligence, program management and new outlooks on enhancement provisions. This will also reveal new value propositions and drive the creation of new revenue channels. Disjointed programming is a common challenge. The central keys to building successful wellness integrations rest in understanding how to incorporate add-ons that add meaning, capture with a widespread attitude, and spearhead meaningful momentum.

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.
Mia Mackman, HVS Managing Director of Spa and Wellness Consulting, leads the spa and wellness aspects of our consulting engagements, encompassing market studies, feasibility studies, strategic planning, valuation, and forecasting. Mia has predicted some of the leading shifts in the transition of the spa and wellness market since 2004. Known for her agility, leadership, and intuitive insight, she works with Fortune 500 companies, private clients, industry groups, and global networks. She is recognized for her unique ability to predict and identify future value propositions and how to navigate, adapt, and excel in a fast-changing market. Contact Mia at (928) 284-8503 or mmackman@hvs.com.

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